Private equity set to buy into growing Clipper

Clipper has positioned itself at the heart of the fast-moving internet retailing world, running logistics services for retailers including John Lewis, Tesco and Asda.

The group, founded by chief executive Steve Parkin as a haulage business in 1992 with a team of three and one van driver, said all options, including financing from a sovereign wealth fund, were open to fund the firm's next stage of development.

"Private equity is one thing that we're looking at," said Mr Parkin, who owns around 70 per cent of the company. "We have an offer on the table to sell a 20 per cent stake in the business for 25m, which would go to funding new contracts.

"But that's not the definite decision. I will choose whatever is right for the business. If that's some kind of sovereign wealth fund or bank club I don't know."

Clipper hopes this next round of fundraising will push it closer to its aim of floating on the main market of the London Stock Exchange. With strong growth continuing over past six months, Clipper said it has no shortage of funding offers.

The group said sales in the six months to the start of October soared 16.1 per cent to 80.9m, while operating profits almost doubled to 4.2m.

The group added earnings before interest, tax, depreciation and amortisation lifted 61.4 per cent to 5.8m.

Mr Parkin said with a strong pipeline of new contracts, it was "bang on line" to hit forecasts of 170m full-year sales and operating profits of 9m.

Clipper has appointed advisers to help to determine the next stage of its growth, as bank funding remains scarce.

The group recently negotiated new debt facilities of almost 20m with Lloyds, said Mr Parkin, but this is not enough to fund its ambitious growth plans which involve taking on more contracts with major retailers.

"Obviously the whole bank scenario has created issues for businesses," said Mr Parkin. "Now we have to think about different ways of funding the business.

"We've been inundated with of funding both from private equity and other sources. It's a huge success story.

"We see it as a stepping stone to an IPO (initial public offering)."

Clipper's mid-term plan remains to float on the stock market, fulfill ing Mr Parkin's lifetime ambition. Having started off as a traditional haulier, the group is now seeing repeated success with its "e-fulfilment" offer, where it meets the logistics requirements of retailers' online shopping arms.

The group has created three e-fulfilment "centres of excellence", in London, Selby and Nottingham.

"Contracts with e-fulfilment (are) having tremendous growth at the moment," said Mr Parkin. "We're the largest e-fulfilment provider in the country by far. People can place orders with us up to 8pm for next-day delivery."

Earlier this year Clipper won a 25m contract with John Lewis, to handle logistics for the retailer's online fashion offering.

Following the agreement with John Lewis, the company manages product despatch, returns and all garment handling for 140,000 lines from its centre at Ollerton in South Yorkshire.

Clipper's services helped John Lewis to pick up the award for Large Etailer of the Year at the recent Drapers Magazine awards, the Oscars of the fashion industry.

Finance director David Hodkin said: "What we have done is diversify. We identified the opportunities of the e-fulfilment market. We saw the way that retail was going and developed the software systems and procedures to embrace it.

"We offer value-added logistics. It includes getting garments store-ready and high-end distribution."

From its humble roots, the company won a number of important contracts in the early years with retailers such as Huddersfield-based Bon Marche and Sir Philip Green which helped it to establish a strong foothold in the transport, haulage and warehousing market.

The company has also made a number of acquisitions in recent years.

It now has employs around 3,000 staff and has 28 European distribution centres, including 22 in the UK. Clipper has around 3.5m sq ft of warehousing space and a fleet of 650 vehicles.